Feds: Audit of SC nuclear complex whitewashed

BEN EVANS, The Associated Press

A company managing South Carolina's Savannah River Site nuclear complex altered findings in a 2007 financial audit to justify expenses to the government, federal investigators said in a report released Wednesday.

The Energy Department's Inspector General said as a result, it cannot verify $1.4 billion in expenses submitted by the Washington Savannah River Company that year.

Under a federal program aimed at cutting down on auditing costs, the company was supposed to conduct independent self-audits to document its expenses. Instead, company managers worked closely with the audit department to smooth over discrepancies – despite documented dissent from professional staff auditors, the report said.

Managers "directed inappropriate changes to valid audit results" and were "permitted to provide after-the-fact justifications and approvals for violations of various ... procedures designed to prevent or detect unallowable costs," the review said.

In one case, managers were allowed to insert required approvals for expenses three years after they were made, according to the report.

"These actions violated professional standards," the report said.

WSRC officials did not immediately respond to a request for comment, but the report says the company disputed some of the findings.

The company lost the Savannah River Site contract in competitive bidding last year. But a joint venture formed by its corporate parent, San Francisco-based URS Corp., recently won a six-year contract worth up to $3.3 billion to handle nuclear waste at the site, which sits outside Aiken, S.C., near the Georgia line.

In October, WSRC agreed to pay $2.4 million to settle fraud allegations involving the Savannah River Site's employee pension fund. The government accused the company of failing to disclose projected cost increases for the fund during contract negotiations with the Energy Department.